AIBT 10-K & 10-Q changes, risk factors and insider trading

WeThe didCompany not have anygenerated revenue orof cost$2,183 for the year ended December 31, 2025, compared to no revenue for the year ended December 31, 2024. Cost of revenuesales fromwas operations$0 for both the years ended December 31, 20242025 and 2023.2024.

ExpensesOperating from operationsexpenses for the years ended December 31, 20242025 and 2023,2024 consisted solely of general and administrative expenses. General and administrative expenses consisted primarily ofinclude consulting fees, board compensation, and legal and professional services. ForGeneral and administrative expenses increased by $212,039, or 13%, to $1,846,856 for the year ended December 31, 20242025, compared to $1,634,817 for the year ended December 31, 2023 our general and administrative expense increased by $1,018,093 or 165%, from $616,724 to $1,634,817.2024. The increase inwas generalprimarily driven by higher consulting fees of $176,324, increased legal and administrativeprofessional expenses was the resultfees of increased$38,072, amortizationand higher advertising and marketing expenses of $607,664,$52,638, increasepartially offset by a decrease in board compensation of $101,250, increase in product development expense of $178,665 and increase in consulting fees of $47,000.$90,000.

Other expenseexpenses for the years ended December 31, 20242025 and 20232024 was composedconsisted of interest expense..expense and loss on extinguishment of liabilities.

As of December 31, 2024,2025, wethe Company had a working capital deficiency of $4,666,666$4,564,798, downcompared fromto a working capital deficiency of $3,394,768$4,666,666 as of December 31, 2023.2024. At December 31, 2024 our2025, current assets weretotaled $185,097$270,107, and consistedconsisting solely of cash. As of December 31, 2024 our currentCurrent liabilities were $4,851,763$44,834,905 and consisted predominantlyprimarily of accrued interest, convertible notes payable, and shares to be issued. WeThe Company had an accumulated deficit of $13,025,007 as of December 31, 2025, compared to $10,809,256 as of December 31, 2024, anreflecting increasecontinued fromoperating anlosses accumulatedand deficitfinancing-related ofactivities $8,960,981during asthe of December 31, 2023.year.

OperatingNet cash used in operating activities usedwas net$458,240 cashfor ofthe year ended December 31, 2025, compared to $259,037 for the year ended December 31, 2024, as compared to using net cash of $106,765 for the year ended December 31, 2023.2024. For the year ended December 31, 2024,2025, cash used in operating activities was primarily driven by oura net loss of $1,848,275;$2,215,751, partially offset primarily by thenon-cash charges, including amortization expense of $667,332, amortization of debt discounts,discounts of $16,973, and a loss of $144,176 recognized on the increaseissuance of common stock to settle liabilities. Additionally, changes in relatedoperating party accrued expenses,assets and theliabilities increaseprovided $929,030 in accounts payable and accrued expenses.activity.

For the year ended December 31, 2023,2024, cash used in operating activities was primarily driven by oura net loss of $1,181,347;$1,848,275, partially offset primarily by stock-basednon-cash compensation,charges, theincluding amortization of debt discounts,discounts of $9,349, amortization expense of $667,883, and a loss of $79,591 recognized on the increaseissuance of common stock to settle liabilities. Additionally, changes in working capital provided $831,917 of cash, primarily driven by increases in related party accrued expenses and accounts payable and accrued expenses.

Financing activities produced cash flows of $165,000 and $0 for the year ended December 31, 2024, and 2023, respectively. We did not pay any cash for interest or for income taxes during the year ended December 31, 20242025 and 2023.2024.

Our consolidated financial statements have been prepared assuming we will continue as a going concern. Our ability to continue our operations as a going concern is dependent on management’s plans, which includes successfully integrating AIBotics,Aibotics, Inc.Inc., which was acquired subsequent to December 31, 2024.2025. The accompanying consolidated financial statements have been prepared on a going concerngoing-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should we be unable to continue as a going concern.

The depreciation of equipment and is dependent upon estimates of useful lives and residual values, both of which are determined through the exercise of judgement. The assessment of any impairment of these assets is dependent upon estimates of recoverable amounts that consider factors such as economic/market conditions and the useful lives of assets.

Three Monthsmonths Ended MarchJune 31,30, 2026 as Compared to the Threethree Monthsmonths Ended MarchJune 31,30, 2025

We did not have any revenue andor cost of revenue from operations for the three months ended MarchJune 31,30, 2026, as compared to $2,183 in revenue2026 and cost of revenue from operations for the three months ended March 31, 2025.

Other expense for the three months ended MarchJune 31,30, 2026 and 2025 was composed of interest expense.expense and loss on extinguishment of liabilities.

For the three months ended MarchJune 31,30, 2026 and 2025 we had a net loss of $418,105$536,968 and $591,397,$486,149, respectively.

Liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. As of MarchJune 31,30, 2026, we had $288,858$233,427 in cash and cash equivalents compared to $255,940 at December 31, 2025, ana increasedecrease of $32,918$22,513 resulting primarily from financing activities offset by cash used in our operations. As of MarchJune 31,30, 2026, we had undiscounted obligations in the amount of approximately $1.3$1.1 million relating to the payment of indebtedness due within one year.

As of MarchJune 31,30, 2026, we had a working capital deficiency of $4,720,284$4,875,875 downup from a working capital deficiency of $4,564,798 as of December 31, 2025. At MarchJune 31,30, 2026 our current assets were $331,050$275,619 and consisted almost entirelyprimarily of cash. At MarchJune 31,30, 2026 our current liabilities were $5,051,334$5,151,494 and consisted predominantly of accounts payable and accrued expenses, related party accrued expenses, convertible notes payable, and shares to be issued. We had an accumulated deficit of $13,443,112$13,980,080 as of MarchJune 31,30, 2026, an increase from an accumulated deficit of $13,025,007 as of December 31, 2025. We plan to fund our operations with our cash on hand and additional financing.

Operating activities used net cash of $36,258$83,280 for the threesix months ended MarchJune 31,30, 2026, as compared to using net cash of $28,360$192,918 for the threesix months ended MarchJune 31,30, 2025. For the threesix months ended MarchJune 31,30, 2026, cash used in operating activities was primarily driven by our net loss of $418,105$955,073; offset primarily by non-cash additions of amortization expense,expense theof increase$330,593, amortization of debt discount of $11,027, loss on extinguishment of liabilities of $76,388, and issuance of common stock for services of $50,000 and changes in relatedoperating party accrued expenses, the increase in accrued interest,assets and liabilities including the increase in accounts payable and accrued expenses.expenses of $214,802, the increase in related party accrued expenses of $144,000, the increase in accrued interest $73,008, the decrease in prepaid expenses of $12,500, partially offset by the increase in inventory of $40,525. For the threesix months ended MarchJune 31,30, 2025, cash used in operating activities was primarily driven by our net loss of $591,397$1,077,546; offset primarily by non-cash adjustments for amortization expense,expense of approximately $328,000 and the gain recognized on common stock issued to settle liability of approximately $55,000, and changes in operating assets and liabilities including the increase in related party accrued expenses of approximately $94,000, the increase in accrued interest of approximately $60,038, and the increase in accounts payable and accrued expenses andof theapproximately increase in related party accrued expenses.$344,739.

Investing activities used net cash of $0 for the three months ended March 31, 2026, and 2025. Financing activities produced cash flows of $69,176$60,767 and $0$250,000 for the threesix months ended MarchJune 31,30, 2026, and 2025, respectively. For the threesix months ended MarchJune 31,30, 20262026, financing activities were composed primarily of proceeds from convertible notes payable of $98,000 offset by $28,824$37,233 of the repayment of convertible notes payable. There were no financing cash flows duringFor the threesix months ended MarchJune 31,30, 2025.2025, financing activities were composed primarily of proceeds from convertible notes payable of $250,000.

For the threesix months ended MarchJune 31,30, 2026, the Company incurred a net loss of $418,105,$955,073, had negative cash flows from operations of $36,258$83,280 and may incur additional future losses. At MarchJune 31,30, 2026, the Company had total current assets of $331,050$275,619 and total current liabilities of $5,051,334,$5,151,494, resulting in a working capital deficit of $4,720,284.$4,875,875. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of time within one year after that date that the consolidated financial statements are issued.

We have identified the policies outlined below as critical to our business operations and an understanding of our results of operations. The list is not intended to be a comprehensive list of all of our accounting policies. In many cases, the accounting treatment of a particular transaction is specifically dictated by generally accepted accounting principles in the United States, with no need for management’s judgment in their application. The impact and any associated risks related to these policies on our business operations is discussed throughout Management’s Discussion and Analysis of Financial Condition and Results of Operations when such policies affect our reported and expected financial results. For a detailed discussion on the application of these and other accounting policies, see the notes to our MarchJune 31,30, 2026, financial statements. Note that our preparation of the financial statements requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of our financial statements, and the reported amounts of revenue and expenses during the reporting period. We cannot assure that actual results will not differ from those estimates.